Should I Buy Earthquake Insurance?

Q: I read your column on earthquake preparedness. And although I don’t think our 11-year-old house needs structural changes, I was wondering if you have any advice on whether to buy earthquake insurance. We are new to the area, so we have no experience or feel for it.

A: Your question is a little far afield for our do-it-yourself column. But it’s a subject we’ve had to consider over the years, and, as you mention, we have addressed earthquake preparedness from a structural perspective. We’re both 40-plus-year residents of the San Francisco Bay Area — earthquake country — and have lived through our share of shakers. We’ve seen pictures rattle and chandeliers swing. We’ve owned homes and income property and have had to grapple with the same question: to insure or not to insure against the Big One.

Here’s our take today.

We’ve always opted not to purchase earthquake coverage. For us, it boiled down to a purely business decision. The cost of coverage was so high, the deductibles so high and the exemptions so many that we simply decided to assume the risk of loss rather than pay the premium. We took the position that the unlikelihood of a catastrophic event outweighed the cost of coverage.Ultimately, a decision will rest on your view of the risk and your comfort level in assuming that risk. No one knows when or where the Big One will hit.

The only major quake we have experienced was the Loma Prieta quake of 1989. We both lived in Alameda at the time, only a few miles as the crow flies from the ill-fated Cypress Structure. That elevated freeway collapsed, but our vintage wood-frame homes survived with no damage. We found out later that the earthquake fault that gave way was several miles to the west, across the San Francisco Bay.

The first thing to find out is if you are in a known earthquake fault area. When you purchased your home, you should have received a Natural Hazard Disclosure Statement. Sellers of real property are required by law to disclose before closing whether the property is in an area subject to natural hazards, including an earthquake fault zone. For a more detailed discussion, see the California Geological Survey and the Alquist-Priolo Act.If you’re not in a known fault area, the risk diminishes.

Next, take a look at your house. Wood-frame houses fare better than masonry homes do in quakes because they flex with the forces of a quake.Finally, don’t assume that just because the home was built in the past 11 years that it’s “quake ready.” The foundation is almost certainly bolted, but you may or may not have the proper shear-wall protection. We suggest that you either crawl under the home yourself or hire an engineer to determine the level of quake protection you have.

Once you know whether the home is on or close to a fault and how strong it is, you’ll be able to make an informed decision on whether earthquake insurance is right for you.

What’s your opinion? Leave your comments below or send a letter to the editor. To contact the writer, click the byline at the top of the story.